November 20, 2013

Board Recommends Disbarment for Lawyer For Fraud Conviction

An attorney discipline board in Washington is recommending Daryl Hudson III, the head of a debt financing company in Washington and former counsel with the U.S. Securities and Exchange Commission, be disbarred over his wire fraud conviction.

The Board on Professional Responsibility earlier this month
recommended disbarment. Hudson was convicted of a crime of "moral turpitude," the board said, warranting automatic disbarment—if the conviction survives appeal.

A federal jury in New Mexico found Hudson guilty of wire fraud in September 2012. Hudson is serving a 70-month sentence in prison. The District of Columbia Court of Appeals is not expected to rule on Hudson's status with the D.C. Bar until his appeal wraps up.

Hudson, a member of the D.C. Bar since 1979, served as an attorney in the enforcement division of the SEC in the 1980s. He later became the chairman and chief executive officer of Hampden Kent Group LLC, a District-based company that offered debt funding to green energy start-ups.

In 2012, he was charged with defrauding a company seeking $80 million in debt financing to build green energy-related equipment. The company, Bluenergy Solarwind Inc., paid Hudson an $85,000 retainer. When the relationship soured—part of Hudson's scheme, the government claimed—Hudson allegedly refused to return the retainer and demanded Bluenergy pay close to $1 million for allegedly violating their agreement.

As part of Hudson's deception, prosecutors alleged, he gave Bluenergy a fraudulent document that was supposed to come from the Federal Reserve Bank of New York. In addition to the jail time, Hudson was ordered to pay more than $1.8 million in restitution.

Hudson's appeal is pending in the U.S. Court of Appeals for the Tenth Circuit.